Rand Logistics in default on two credit agreements

AUGUST 16, 2016 — In a filing with the SEC today, Great Lakes operator Rand Logistics, Inc. (NASDAQ: RLOG) said it is unable to file its Form 10-Q for the first fiscal quarter ended June 30, 2016 within the prescribed time period.

In the filing, Rand Logistics said:

“Certain covenant defaults presently exist under Rand Logistics, Inc.’s (the ‘Company’) First Lien Credit Agreement and Second Lien Credit Agreement with respect to which the Company is actively pursuing waivers and amendments. Pending resolution of such defaults the Company is unable to finalize its balance sheet to be included in the Quarterly Report on Form 10-Q for the first fiscal quarter ended June 30, 2016 (the’Quarterly Report’). Accordingly, the Company is unable to file the Quarterly Report within the prescribed time period without unreasonable effort and expense. The Company expects to file the Quarterly Report as soon as practicable.”

In another filing Rand Logistics said:

“The Company is currently in default under the Credit Agreement, dated as of March 27, 2015 (as amended, the “First Lien Credit Agreement”), among the Company and certain of its subsidiaries, Bank of America, N.A., as agent and lender, and certain other lenders party thereto as a result of: the Company’s failure to maintain the required Maximum Senior Funded Debt to EBITDA Ratio (as defined therein), calculated as of June 30, 2016; the occurrence of a Change of Control (as defined therein) caused by the nonrenewal of Scott Bravener’s employment agreement with the Company; and the existence of similar defaults under the Second Lien Credit Agreement (as defined below).

“The Company is currently in default under the Term Loan Credit Agreement, dated as of March 11, 2014 (as amended, the “Second Lien Credit Agreement”), among the Company and certain of its subsidiaries, Guggenheim Corporate Funding, LLC, as agent and lender, and certain other lenders party thereto as a result of: the Company’s failure to maintain the required Maximum Senior Funded Debt to EBITDA Ratio (as defined therein) and Maximum Total Funded Debt to EBITDA Ratio (as defined therein), in each case calculated as of June 30, 2016, and the occurrence of a Change of Control (as defined therein) caused by the non-renewal of Scott Bravener’s employment agreement with the Company.

“The Company is actively pursuing waivers and amendments to address the covenant breaches discussed above.

“There can be no assurance, however, that the Company will be able to obtain any such waivers or amendments in a timely manner, on commercially reasonable terms, or at all. Pending resolution of the defaults, the Company believes that it will continue to be permitted to request additional funds from the First Lien Credit Agreement lenders in accordance with the terms of the First Lien Credit Agreement.”

None of this information appears in a press release issued by the company today which, it says, “previews” its FY 2017 first quarter financial results.